1997 (9) TMI 308 - AT - Central Excise

Summary

Issues: Duty demand for clandestine removal of goods, non-consideration of Chemical Examiner's report, violation of principles of natural justice, failure to correlate goods seized, non-speaking order, remand for reconsideration.

Analysis:
1. The appeal was filed against duty demand orders due to alleged clandestine removal of goods. The Department accused the appellants of removing Polyester Predominant as Predominant Fabrics. The Collector's order did not address the Chemical Examiner's report on samples taken from the appellants' factory, focusing only on reports from dealers' premises.

2. The appellants' consultant argued that the Collector ignored the Chemical Examiner's report on samples from the factory. Six out of seven samples favored the appellants, but one showed polyester predominance. Lack of consideration of these reports violated natural justice principles. The correlation between goods sent and samples from dealers was also not established.

3. The appellants contended they supplied polyester predominant fabrics besides cotton ones, paying appropriate duty rates. The Collector's order lacked discussion on this aspect, leading to a non-speaking order. The evidence collected by the Department should have been analyzed, and the Managing Director's statement should have been assessed in light of this evidence.

4. The Department's defense relied on the Managing Director's and customers' statements. The Tribunal noted the Department's own view that the Managing Director's statement needed corroboration. The failure to consider evidence gathered by the Department violated natural justice principles, necessitating a remand for reevaluation by the adjudicating authority.

5. The Tribunal found that the evidence, including the Chemical Examiner's report, was crucial and should have been analyzed by the adjudicating officer. The failure to consider this evidence and the appellant's contentions warranted a remand for a fresh consideration. The impugned order was set aside, and the matter was remanded for a de novo assessment, ensuring a fair opportunity for the appellants.

6. The Tribunal emphasized the importance of considering all evidence and arguments presented by the appellants, especially regarding the types of fabrics supplied and duty rates paid. The lack of discussion on these crucial points in the impugned order led to the decision to remand the case for a comprehensive reconsideration by the adjudicating authority, upholding the principles of natural justice.